30 June 2015
Category: Articles | Latest news

Investment Lending Change Summary

 

  • A PDF version of the table below is available for download using this link.
  • The PDF version of the table is recommended for people viewing this page on their phone or tablet as the HTML version of this table is optimised for desktop viewing.
Lender Change to investment loan  max LVR? Change to serviceability? Removal of investment loan discounts? Further helpful info
ANZ No change Serviceability buffer  increased by 0.50% to 2.75% (note: also applies to OO loans) For customers with Investor only lending: ANZ will only offer advertised rates, discretionary pricing will be not be available.

For customers with existing Owner Occupier lending with ANZ: ANZ will offer discretionary pricing on Investor Loans

Bankwest Yes, capped at
80%
From 27th June 2015

  • Serviceability floor increased by 0.37% to 7.57%
  • Changes to serviceability calculation to reflect that the principle loan amount will only reduce during the P&I term of the loan only, not across the full loan term when there is an I/O period (e.g. a loan with a 5 year I/O term and 30 year loan term only has a 25 year P&I period to calculate repayments for).
  • Currently, 100% of the value of bonuses, commissions, overtime and allowances can be used in the serviceability calculation for Retail product applications. The amount to be used in the servicing calculator is reducing to 80%.
  • There will be the need to manually calculate 80% of any bonuses, commissions, overtime and allowances to include in the serviceability calculations. The reduction in the amount of bonuses, commissions, overtime and allowances acceptable will apply to all applications submitted for formal approval from 27 June 2015.
Special pricing on Complete Variable for any loan where the primary purpose is investment will no longer be available. Bankwest has reviewed its Retail Annual Living Expenses following the receipt of the most recent quarterly HEM figures.First adult
Current = $15,648
New = $14,256Subsequent adult
Current  = $12,902
New = $12,983

First Child
Current = $5,238
New = $5,246

Subsequent child
Current = $3,652
New = $3,669

CBA No change From 27th June 2015 the assessment rate used will be the higher of the following rates for these products:Product = Standard Variable Rate (SVR) including 12 month discounted rate & 1 year guaranteed rate.

  • 7.25% pa
  • SVR plus 2.25% less any concession
  • 5 year fixed rate at time of application less any concession

Product = No fee variable rate

  • 7.25% pa
  • No fee variable rate plus 2.25%
  • 5 year fixed rate at time of application

Product = Fixed Rate (1 to 5, 7, 10  & 15 years)

  • 7.25% pa
  • Standard Variable Rate plus 2.25% less any concession
  • 5 year fixed rate at time of application less any concession
  • Relevant fixed rate selected in the application less any concession

Product = Rate Saver

The higher of the following rates:

  • 7.25% p.a
  • SVR plus 2.25%
  • 5 year fixed rate at time of application
  • less the difference between the SVR and the BVR

Product = Line of Credit

  • 7.25% pa
  • Standard Variable Rate plus 2.25% less any concession
  • 5 year fixed rate at time of application less any concession plus the difference between the residential equity rate & the SVR

New Servicing Loading
CBA will automatically apply a new servicing loading of 20% to all repayments on existing CommBank and OFI Home/Investment Home Loan and Lines of Credit.
Note: CBA will exclude all CommBank and OFI Credit Cards, Store Cards, Personal Overdrafts, Personal Loans, Business Loans and Asset Finance from this servicing loading.

Discretionary pricing removed From 27th June 2015

  • Will only accept 80% of any Work Allowances/Overtime, Investment income, Bonuses and Commission for servicing purposes for all new Home /Investment Home Loan and Line of Credit applications.
  • For all new Investment Home Loan applications negative gearing will not apply where the LVR is greater than >90%.
  • The maximum LVR (including LMI capitalisation) for all
    Owner Occupied Home Loan applications is now 95%.
  • CBA are reducing the maximum acceptable gross Rental Yield for servicing on investment properties to 6% p.a.
Heritage Yes, capped at
80%
Adopting whichever is highest – the qualifying rate, or the actual rate + 2%. Qualifying rate remains at 7.15%. Unavailable above 80% Heritage will be qualifying lending commitments for mortgage loans by adopting whichever is highest – the qualifying rate, or the actual rate + 2%. Qualifying rate will remain at 7.15%
Homeloans Ltd Yes, capped at 90% Existing loan commitments assessed at the higher of repayment calculated at Macquarie assessment rate or declared repayment amount No change New loan tiers for Optima – separate rates for O/O & P&I
ING Yes, capped at 80% for NSW All other states capped at 90% No change Interest rate increases on Mortgage Simplifier & Orange Advantedge with LVRs above 80% All maximum LVR parameters include LMI premiums (i.e. LMI premiums will not be
capitalised above the maximum LVR)
Macquarie Yes, capped at 90% Existing loan commitments assessed at the higher of repayment calculated at Macquarie assessment rate or declared repayment amount- Rental expense will be assessed at the declared amount Increased fixed rates by up to 30bps Two loan tiers introduced and lower rates for O/O and P&I
NAB Broker Yes, capped at
90%
The qualifying rate used must be the greater of:

  • the serviceability floor assessment rate of 7.40% pa OR
  • effective borrower rate plus 2.25%

A serviceability repayment loading (buffer) will be automatically applied to existing mortgage repayments. This applies to customers’ existing loans which are not being refinanced or paid out as part of the application. The loading buffer will be 28% of the loan repayment amount.

Verification of existing mortgage repayments will be required to be performed when that facility will remain (i.e. not being paid out or being refinanced). The information required to be verified is the contracted repayments for P&I facilities and the loan limit & interest rate for Interest Only & Line of Credit facilities. Where there are existing NAB Home Lending facilities, and these will remain in place after the new loan, these details can be verified from NAB systems.

IMPORTANT: these changes apply to loan regardless of loan purpose.

No change Low Doc loans: increase rates by 0.15% p.a.Full Doc loans: differentiate pricing for OO and Investment loans
NAB Yes, capped at
90%
The qualifying rate used must be the greater of:

  • the serviceability floor assessment rate of 7.40% pa OR
  • effective borrower rate plus 2.25%pa serviceability repayment loading (buffer) will be automatically applied to existing mortgage repayments.

This applies to customers’ existing loans which are not being refinanced or paid out as part of the application. The loading buffer will be 28% of the loan repayment amount.

Verification of existing mortgage repayments will be required to be performed when that facility will remain (i.e. not being paid out or being refinanced). The information required to be verified is the contracted repayments for P&I facilities and the loan limit & interest rate for Interest Only & Line of Credit facilities. Where there are existing NAB Home Lending facilities, and these will remain in place after the new loan, these details can be verified from NAB systems.IMPORTANT: these changes apply to loan regardless of loan purpose.

No change
PLAN Lending Yes, capped at
90%

The qualifying rate used must be the greater of:

  • the serviceability floor assessment rate of 7.40% pa OR
  • effective borrower rate plus 2.25%A serviceability repayment loading (buffer) will be automatically applied to existing mortgage repayments. This applies to customers’ existing loans which are not being refinanced or paid out as part of the application.

The loading buffer will be 28% of the loan repayment amount.

Verification of existing mortgage repayments will be required to be performed when that facility will remain (i.e. not being paid out or being refinanced). The information required to be verified is the contracted repayments for P&I facilities and the loan limit & interest rate for Interest Only & Line of Credit facilities.

IMPORTANT: these changes apply to loan regardless of loan purpose.

Additional discount for O/O 0.15 loading for investment loans
Suncorp No change No change No change Variable and 3yr Fixed Package special <80+P&I for Investment & O/O
St George
(including BoM & BSA)
No change Annuity, superannuation or private pension will be assessed at 80% Rental income from investment property will be assessed at a maximum of 60% when the market value or purchase price is:

  • Greater than $2,285,000 in ACT/ NT/ QLD/ SA/ TAS/ WA; and
  • Greater than $3,429,000 in NSW (excluding ACT)/ VIC
  • Income verification requirements for Non-Mortgage Insured and Mortgage Insured applications are now aligned.
  • Buffer rate will increase to 2.10%, the Floor rate will increase to 7.10% and serviceability calculators will be updated with the December 2014 figures for HEM.
  • Credit cards or store cards to be assessed at 3% of the approved credit limit.
No change Basic HL and Refinance rebate offer extended
Westpac No change
  • Rental shaded to 60% for prestige properties (>$3.429m in NSW & Vic or >$2.285m in all other states)- Negative Gearing removed – income was not taxed and shaded to 80%
  • Credit Card repayments assessed at 3% (previously 2%)
  • New HEM table with income band added.
  • Annuity, superannuation or private pension assessed at 80% (previously 100%).
  • Income Calculation changes.
Discretionary pricing reduced on the following products:

  • Rocket Investment Loans
  • Flexi First Investment Property Loans
  • Fixed Rate Investment Property Loans
  • Variable Rate Investment Property Loans
Property Seller cashback campaign